AIRPORT LAWSUIT BILL GREW TO $1.1M

Lindbergh officials passed up chance to settle with contractor for $400,000

Amount of original contract with West-Tech to remove and store toxic wastes

San Diego 
Officials at Lindbergh Field paid more than $1.1 million in legal expenses — not including a $767,000 judgment — to defend a lawsuit they could have settled at one time for $400,000.

The case involved a dispute over where to store tons of toxic waste left at the Naval Training Center when the airport took possession from the military for an expansion.

In 2008, when planning improvements at Terminal 2, the airport needed someone to haul away contaminated waste that remained on the site after decades of use by the U.S. military.

West-Tech Contracting of Escondido won the job with an $18.8 million bid.

Months into the project, airport officials instructed the company to dispose of the tainted soil at the Copper Mountain Landfill in Wellton, Ariz.

The original agreement made no mention of where the debris should be stored. It only stated that the destination must be an appropriate and properly permitted facility.

West-Tech maintains that the site it selected, a different landfill in Yuma, Ariz., met all of the criteria called for in the contract. The airport says the Yuma site lacked a federal license at the time the bid was submitted, and officials had the right to select another site.

The company agreed to use Copper Mountain, then requested that the airport pick up the additional cost.

The lawsuit centered largely on the contractor’s demand of $2 million for breach of contract and other actions. Airport lawyers argued that West-Tech’s claim was too high and inconsistent with its own accounting records.

West-Tech owner Rick Engebretsen said he tried to settle the case for $400,000 just before a trial was scheduled to begin early last year. The San Diego County Regional Airport Authority offered $300,000.

Several months later, after West-Tech spent more than $200,000 in additional legal fees, Lindbergh Field officials boosted their offer to $400,000. That offer was rejected.

During litigation, which generated 1 million-plus pages of documentation, the airport said it was entitled to dictate where the debris would be stored.

Airport lawyers also pointed to an agreement — signed by all parties in 2009 — with a check box stating that the document settled all claims and therefore West-Tech was entitled to no more money.

Engebretsen produced a copy of the same document — without a mark in that check box. West-Tech lawyers alleged that someone working for the airport checked the box after Engebretsen signed the document.

Breton Lobner, the airport’s top attorney, denied his lawyers or staff altered the paperwork. He said the agency goes to court only when it’s justified, and he recommends a settlement when the facts dictate doing so.

“In the West-Tech case, I believe West-Tech took advantage of the authority when it bid,” Lobner said. “It did so by bending the rules and submitting a bid with Yuma as the dump site.”

A recording of a 2008 project meeting appears to support West-Tech’s central claim that it had the latitude to use the Yuma storage site. The company obtained the recording during the discovery phase of the trial.

“I cannot believe we’ve just let the contract out on the street that did not have a set of selected landfills, approved landfills,” an unidentified speaker said at the meeting. “If (West-Tech) goes to a site that is EPA-approved but yet you guys are not approving it, then we’ve got a problem.”

In July, a jury unanimously awarded the contractor more than $630,000 in damages. Lobner noted that was less than the $2 million the company sought.

“The authority had its day in court, prevailing on a part of the case and losing on other portions,” Lobner said. “It has decided to accept the verdict and not appeal.”

Lindbergh Field is governed by a seven-member board of elected and appointed officials. The panel oversees 400 employees and a $190 million operating budget. The authority is funded with fees paid by vendors and the flying public. In 2011, approximately 16 million passengers traveled through the airport.

Engebretsen criticized airport officials for their conduct during the case.

“The airport authority was of the mind that they will make our life difficult and miserable until we go away,” he said. “They know we were a small business and had no conceivable notion that we would have the staying power to go to trial.”

Lobner said fault did not lie with their airport’s legal team.

“The core obstructionists in this case were West-Tech’s lawyers,” he said.

Before trial, two mediators concluded that the airport should pay $600,000 or more to resolve the complaint.

Joshua Chanin, a professor of public policy at San Diego State University, said public officials have an obligation to defend lawsuits vigorously, but they also must know when to avoid running up legal fees.

“If two different mediators said settle the case, they should have settled the case,” Chanin said. “Instead, they sent the message to future plaintiffs: Don’t tangle with us.”

Following the jury verdict, both sides in the West-Tech litigation sought to recover attorney fees from the opposing party. The judge added almost $140,000 in various costs to the original judgment against the airport, for the new total of $767,000.